While studying the induction of hormone responsiveness in cultured cells, we discovered that production of prostaglandin E2 and F2 alpha was markedly reduced in the transformed MDCK cells as compared to that in the parental line. The loss of production was neither due to a defective secretion of prostaglandins nor due to an inability to incorporate arachidonic acid, the precursor for prostaglandins, into cellular phospholipid in the transformed cells. Our preliminary studies show that phospholipase activity which releases arachidonic acid for prostaglandin synthesis and prostaglandin synthetase activity were greatly diminished in the transformed MDCK cells. The reduced production of prostaglandin was also seen in several other transformed cell lines.